Should COVID-19 Relief Be Given to State and Local Governments?

I have severely mixed feelings about the recommendation of the editors of the Washington Post:

President Biden’s call for $350 billion for state and local governments thus comports with his call for national unity. There are, however, legitimate issues with the proposal, in light of two realities: The first is precisely the widely varying fortunes of the states, whose average revenue loss was 3.3 percent between March and November of 2020, compared with the same period in 2019, according to data provided to us by the Urban Institute. (The states’ revenues through June are projected to fall 10.8 percent short of pre-pandemic plans, according to a December report by the National Association of State Budget Officers.) Eighteen states’ revenues are either flat or up; seven lost 2 percent or less. After updating for revenue through December, California, by far the most populous state, reported a flood of cash from wealthy taxpayers so large that it now has a $34 billion surplus, $22 billion of which will be placed in reserves.

As these admittedly sketchy numbers imply, the second reality is that state revenue loss, though significant, has been smaller than feared in the early days of the pandemic. One reason is that lower-paid workers who generally do not pay income taxes bore the brunt of layoffs, while upper-income citizens kept their paychecks and reaped capital gains in an unexpectedly booming stock market.

Congress should account for these facts, both in determining the ultimate size of the aid package and in establishing a formula for distributing it. Past state and local aid tied to pandemic needs went out in $1.25 billion minimum chunks to each state, with the balance divvied up according to state population. Now we have better information about the various states’ true needs; legislation can and should target aid where it’s most needed, based on states’ coronavirus caseloads and unemployment rates — and their revenue-raising performance. Lawmakers should endeavor as well to guarantee that more funds reach smaller localities; previous pandemic-related legislation only set aside a share of state dollars for cities and counties encompassing a half-million in population or more. The District should get the same share as it would if it were a state.

If Republicans and Democrats want to unite the country and put red-state/blue-state hostility behind them, devising a sufficient, realistically targeted, state and local aid package would be a very good place to start.

for any number of reasons. If only we had institutions that were presently in place and could assess state and local needs!

On the o0ne hand I recognize that some people are suffering. But on the other…

Perhaps among those reasons is heavily colored by my observation of the state and local governments I know best. Here in Illinois in Chicago all public employees have been deemed essential and are among the “upper-income citizens” who’ve kept their paychecks. Even now the members of the Chicago Teachers Union is fighting for its right to be paid not to work (or, perhaps more charitably, to bear enormously reduced workloads—truancy in remote learning here in Chicago is estimated to be around 50%). It’s hard to estimate. In Chicago at least they’re not reporting truancy in remote learning—a blatant fraud of Title 1. In Illinois and Chicago between 20% and 30% of public budgets go to pay the pensions of retired public employees since far too little money was put away for that purpose when there was no pandemic. If a less politically-motivated and more pragmatic approach had been taken by state and local governments during 2020 they might not be scrambling for funds now.

And I just don’t think, as the editors point out, that California needs federal help. But we can assume with a confidence based on experience that any method of allocating funds at the federal level, whether done by Congress or bureaucrats, will be politically motivated and will go to California, New York, Florida, etc. while Illinois gets short shrift.

I should also add that I remain unconvinced by the argument that monetary sovereigns never need to choose among alternatives or set priorities.

All in all I think we’d be better off devoting more money to genuine public goods, i.e. public health programs, than to subsidize the folly of state and local governments. If we subsidize them, they’ll just continue their profligate, irresponsible ways.

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Lies, Damned Lies, and Differences of Opinion

My preferred definition of lying is Aquinas’s: the knowing telling of an untruth with the intent to deceive. I sincerely believe that we need to return to that understanding or something that approximates it. Sadly, the currents seem to be flowing in the other direction.

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Snider’s GOAT

I wanted to commend to your attention what I found to be by far Jeffrey Snider’s best offering ever at RealClearMarkets. It describes in some detail the “Long Depression” of 1873-1878 and its relevance to today, largely eschewing the jargon of his other pieces. Typically, if you don’t know what the eurodollar is, you’re lost.

Here’s the conclusion:

Facing 2021, there are now 10 million fewer jobs in the United States, as well as almost 2 million new jobs that never happened (a number already insufficient to begin with), still more than 900 thousand weekly jobless claims indicating more destructiveness, and, in many places, an undeterred belief none of this will matter because…”stimulus” of the same untruthful, unstable kind which has been introduced by those who don’t want to realize, or anyone else to realize, the situation for what it truly has become.

I found the piece illuminating for a personal reason. My grandfather’s childhood was during the Long Depression and I suspect the experience colored his later views in ways I can only speculate about.

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The Best Plan for 1970

The editors of the Washington Post laud President Biden’s immigration plan, saying it would truly “put America first”:

The U.S. population growth rate in the just-ended decade was the lowest since the first national census in 1790, according to the Brookings Institution — lower even than during the Great Depression of the 1930s. The number of Americans below the age of 18 actually shrank in the 2010s, by more than 1 million.

That stagnation, the product of an aging population and historically low fertility rates, cannot be reversed by immigration alone. But it will certainly be exacerbated, and has been in the past four years, by a policy hostile to newcomers. In President Donald Trump’s penultimate year in office, annual net immigration fell below 600,000, the lowest level in decades; it was more than 1 million in the final years of the Obama presidency.

That stagnation, the product of an aging population and historically low fertility rates, cannot be reversed by immigration alone. But it will certainly be exacerbated, and has been in the past four years, by a policy hostile to newcomers. In President Donald Trump’s penultimate year in office, annual net immigration fell below 600,000, the lowest level in decades; it was more than 1 million in the final years of the Obama presidency.

Mr. Biden is moving quickly where he can — fully reinstating the Obama-era program providing work permits and deportation protection for “dreamers,” young migrants brought to this country by their parents; rescinding Mr. Trump’s 2017 travel ban from majority-Muslim countries; halting construction of the southern border wall; and reining in the Trump administration’s aggressive deportation policies. He has also signaled he will increase annual refugee admissions, which Mr. Trump poleaxed, and scrap a Trump administration rule that denies green cards to immigrants deemed likely to use public benefits such as food stamps.

Other measures will require congressional action. Under legislation Mr. Biden is sending to Congress, green cards conferring legal permanent residency would be granted to dreamers as well as to immigrants from strife- and disaster-wracked nations who have been here for years.

The president is also pushing tougher border security — in recognition that the new administration is not inviting a wave of new migrants, still less amid a pandemic — though not as a precondition for his immigration reforms. His more impactful, long-term strategy to dissuade new waves of illegal immigrants is a concerted aid effort to boost economies and contain crime in Central America.

Mr. Biden has laid out an immigration program that would genuinely put America first.

I see four major problems with Mr. Biden’s plan:

  • The $15 minimum wage which he also supports
  • It makes reducing carbon emissions harder
  • It’s too expensive
  • It isn’t 1970

When conjoined with the $15/hour minimum wage he supports, it would foster an increase in the depth and reach of the underground economy, much of which’s labor pool is comprised of illegal immigrants. The sad reality today is that if someone wants to come into this country across our southern border, he or she will. There is no enforcement measure which cannot be evaded or suborned.

The cheapest, easiest, least painful way for the U. S. to reduce its carbon emissions, another policy which Mr. Biden supports, is to reduce U. S. population. Contrary to what the editors suggest, we don’t need to increase U. S. population. We need to reorient our economy away from low wage labor and high volume personal consumption. We need to adjust to fewer people not bring in more.

For some reason advocates of increased immigration never seem to take the costs into account. Every additional family of five (two parents and three children) incurs public costs of about $40,000 a year or more. The immigrants we need are those who can pay those costs. Most of the immigrants we take in cannot.

But most importantly his plan would have been great if adopted in 1970 but a lot has changed since then. Them the marginal product of labor (the basis for increasing wages) wear increasing, had been increasing for 200 years, and would increase for another decade. It has been decreasing for the last 40 years. It is no surprise whatever that wages for people with high school education only or less have been decreasing in real terms over that interval. We just don’t need more workers with limited English and no legal skills that are in demand. The data on this could not be clearer.

Additionally, a seemingly neverending supply of such workers skews our economy away from the industries and reforms that would lead to higher wages for U. S. workers.

Finally in 1970 approximately 4% of the people here were immigrants. Now nearly 15% are—nearing the highest percentage in American history and higher than any other major economy. There are social costs associated with that large a population of immigrants, many of them from Mexico and Central America. Those costs are largely borne by blacks, young people, and other immigrants.

In 1970 ordinary people could get jobs that paid enough to live on, raise a family, and have a reasonably comfortable retirement. That is no longer the case. That needs to change and it will not change until we redirect our economy along different lines—lines that don’t require millions of unskilled or semi-skilled workers with limited English.

What we need for 2020 and beyond, unlike what Mr. Biden has proposed, is an immigration system that makes it nearly impossible for non-citizens or those here without permission to work here. That is the sort of system adopted by Canada, Australia, and New Zealnd—the countries we most closely resemble.

One more thing. The last time we extended the possibility of citizenship to those here illegally only a minority of those eligible ever became citizens. I don’t know why that was the case but it definitely was the case. It’s an issue for activists and political operatives not for the immigrants themselves.

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Executive Orders

I listened with interest to President Joe Biden’s remarks yesterday on signing his executive orders regarding the COVID-19 pandemic and it moved me to write some general observations about executive orders. I am one of those rare creatures who care both about policy and process. I believe in republican government and am wary of democracy, at least in the debased form in which the word is used these days. If you want more democratic government, why not direct democracy? Somehow I see no advocates of more democratic government arguing for direct democracy.

In general I think that executive orders should be avoided and are basically a sign of Congressional non-feasance. If you want more or different things to happen, start electing different Congressional representatives.

  • Presidents’ powers are actually pretty limited. Attention should be paid to the relevant empowering statutes. Most of them are probably unconstitutional but that’s another subject.
  • I think a president should have pretty much unlimited power to reverse a previous president’s executive orders. Yes, I think that the courts decided wrongly in the cases brought before them during Trump’s term of office on that very subject.
  • You cannot coherently decry authoritarian government and praise executive orders. They are what authoritarian rule looks like.
  • I believe the president has the authority to direct all executive departments to pay a minimum wage of $15/hour (or any other figure) for federal employees and contractors but does not have the authority to appropriate the money to pay it. I would also reject suits for payment of money never appropriated on grounds of sovereign immunity but that’s another subject.
  • I don’t think the president has the authority to mandate a national $15 minimum wage full stop. An executive order to that effect would be an impeachable offense.
  • An executive order not to enforce our immigration laws would be an impeachable offense.
  • Absent a declaration of emergency and martial law, I don’t believe that presidents have the authority to mandate the wearing of facemasks. I don’t believe the Congress has the authority to mandate such a thing, either. Could the president mandate that on federal lands? It depends somewhat on the empowering legislation but I doubt it. I think that people would be fully entitled to ignore such a mandate.

I’m not opposed to wearing facemasks and I think those who reject it are being foolish, reckless, and irresponsible. But there’s a difference between something being recommended and an enforced mandate.

I was caught aback by President Biden’s claim that rigorous wearing of facemasks would save 50,000 lives over the next 100 days. One of the great handicaps of a pledge to truth and science is that you should tell the truth and apply actual science. Over the last year approximately 1,000 people have died of COVID-19 (or, at least, died in the presence of a diagnosis of COVID-19) per day. Unless there is an associated claim of an enormous upswing in deaths over the next 100 days, that amounts to the claim that a marginal increase in the wearing of facemasks would result in a 50% decrease in the number of deaths. Is there actual evidence that such a marginal increase would have that effect? There’s data contrasting wearing facemasks with not wearing facemasks, particularly in health care settings, but is there actual data supporting the claim that a 10% or 25% increase in wearing facemasks would result in a 50% decrease? Maybe things are different in other places but hereabouts wearing facemasks in stores and so on is practically universal. The only place left is in the home. Anyone who believes that the mandate would extend into the home is living in a fantasy world.

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Scuttlebutt

I wanted to pass along a little scuttlebutt. The Chinese New Year holiday begins on February 11 and will continue until February 17. It is a commonplace for people working in China’s factories in its cities to return home to their villages to celebrate the new year.

What I’m hearing is that people are leaving early, fearful that their cities will be locked down in quarantine. Significant attribution after the New Year’s celebration is also a commonplace. I’m also hearing that higher than typical attrition is expected this year.

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A Nice Speech But…

The editors of the Wall Street Journal liked President Biden’s inaugural address, too:

Whatever their partisan affiliation, all Americans can take pride in Wednesday’s inaugural proceedings for President Joe Biden. The peaceful transfer of power from one party to another is a sign of underlying democratic strength no matter our current political distemper.

The ceremony at the Capitol had an unabashed patriotic feel that is all too rare these days. Traditional anthems and prayerful invocations were the order of the hour. Former Presidents were on hand from both major parties as usual, even if Donald Trump wasn’t. No one took a knee when Lady Gaga sang the national anthem.

And it was especially moving, at least to us, to see new Vice President Kamala Harris and her husband walk down the Capitol steps escorting Mike Pence and his wife to their waiting car. Mr. Pence in particular deserved this traditional show of respect after his role on Jan. 6 when he refused to reject the state electoral votes as President Trump demanded. He should be getting more praise than he is for that display of constitutional principle.

These rituals send a message to a diverse country, and to the world, about America’s fundamental institutional strength despite a bitter election campaign and the turmoil of recent weeks. In China the transfers of power are from one Communist Party cadre to another, and public political rites are limited to unanimous acclamation. Enemies have often misjudged America’s raucous politics for national weakness—to their eventual regret.

Mr. Biden struck many good notes in an Inaugural Address that will be remembered more for its moment following the Capitol riot than for its words. The speech had a personal flavor with touches of his Catholicism, such as quoting St. Augustine and praying for the dead. In this and in other personal manners, the new President is refreshingly unwoke.

The overall theme was “unity,” which he called “our path forward.” His best note on that point was a call to “start afresh” and listen to one another. “Politics doesn’t have to be a raging fire,” he said. “Disagreement should not lead to disunion.”

However, they didn’t hesitate in pointing out its glaring shortcoming:

Yet in this call to unify there was also too much of a suggestion that we are obliged to unite around one point of view. “I know that the forces that divide us are deep and they are real. But I also know they are not new,” Mr. Biden said. “Our history has been a constant struggle between the American ideal that we all are created equal, and the harsh ugly reality that racism, nativism, fear, demonization have long torn us apart.”

So our political differences are between those who believe in American ideals and those who are racists and nativists? This sounds too much like Barack Obama’s habit of casting differences of ideology or policy as divisions between enlightenment and bigotry. This is divisive in its cultural and moral condescension, as the Obama years proved in creating the political opening for Mr. Trump.

They then touch on the point I’ve made about unity:

Mr. Biden is right that there is a difference between “truth” and “lies,” and too much political discourse is strewn with falsehoods. But that fault rests with partisans on all sides. Most political differences aren’t between truth and lies. They are debates about the tradeoffs between core principles like freedom and equality, or over the best means to achieve good ends.

On that point we heard too little in Mr. Biden’s speech to reassure conservatives now being purged and ostracized that he will call off the emboldened progressive censors. If his pursuit of social justice becomes a drive to blame every inequity in American life on racism, he will divide more than unite. If he insists that those who disagree on climate change are “deniers” who care nothing for the planet, he will alienate millions (see nearby).

We know with a conviction based on experience that the media cannot be relied on to be the arbiters of truth; that applies both to conventional media and to social media. My advice comes, once again, from Mr. Dooley: trust everyone but cut the cards. Read widely. Don’t take anything at face value.

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A New Hope

The editors of the Washington Post are ecstatic about Joe Biden’s having been inaugurated president:

IF WORDS alone could unify a nation, the United States would have come together after then-President Donald Trump proclaimed, in his inaugural address four years ago, “The Bible tells us how good and pleasant it is when God’s people live together in unity. . . . When America is united, America is totally unstoppable.” And so, after President Biden’s inaugural address, in which he repeated the word “unity” eight times and portrayed the country as able to accomplish great goals when it acts as one, the public is entitled to ask: Could this time be different?

We would answer skeptics with an emphatic yes. There are many reasons to hope Mr. Biden’s message, delivered with evident passion and no little eloquence, could have real effect.

They conclude:

Mr. Biden did not urge unity at the expense of principle, or in service of some bland policy agenda. His welcome reference to the right to dissent and disagree as “perhaps this nation’s greatest strength,” in no way denied that he, too, would fight for what he and those who voted for him believe in, including long-postponed action to stem climate change and uproot systemic racism. He called out white supremacy by name and pledged to “defeat” it. Whereas four years ago, Mr. Trump launched a bizarre lie exaggerating attendance at his ceremony, Mr. Biden demanded adherence to truth.

A final reason to hope: Actions speak louder than words. Four years ago, Mr. Trump repaired from the Capitol to the White House to sign an executive order curtailing Obamacare and, a week later, issued his notorious ban on Syrian refugees as well as travelers from certain Muslim-majority countries. Mr. Biden spent his first day undoing those orders and others, while directing his administration to extend pandemic-crisis protections for renters and student borrowers.

In both tone and substance, this president spent his first day harking back to the serious, responsible traditions of the office. It felt bracingly, refreshingly new.

That is mild praise indeed compared to some of the pieces from their and the New York Times’s columnists and the gauzy, dizzy pieces on broadcast news.

The editors are right to be happy and to give the incoming administration the benefit of the doubt.

However, none of that detracts from the reality that we need a press willing to, in the words of Mr. Dooley, “comfort the afflicted and afflict the comfortable”. More on this in a subsequent post.

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Should the Biden Administration Retain Trump’s China Policy?

In an op-ed at the Washington Post H. R. McMaster argues that the Biden Administration would be prudent to retain the foreign policy shift towards China that the Trump Administration put in place:

The shift was long overdue, because U.S. policy between the end of the Cold War and 2017 was based on a flawed assumption: that China, having been welcomed into the international order, would play by the rules, and, as it prospered, would liberalize its economy and, ultimately, its form of governance.

Instead, the Chinese Communist Party pursued an increasingly aggressive agenda, exploiting the United States’ policy of cooperation and engagement. As national security adviser at the time, I was among those who worked on the policy underpinning the strategic framework. Foremost among our new, more-realistic assumptions about the CCP’s aims was our belief that “strategic competition between the United States and China will persist, owing to the divergent nature and goals of our political and economic systems.”

As China has continued its aggressive economic and military policies, the accuracy of that assessment has been confirmed. No doubt the Biden administration will see ways to improve the strategic framework we devised, but continuity with the approach is essential. President-elect Joe Biden’s policy advisers can strengthen the framework by correcting three common misunderstandings about it.

I think there is next to no prospect of that happening. If it does happen President Biden will need to find some way of rehabilitating the policy among his own caucus which I suspect will be impossible to effect.

I think that Gen. McMasters’s take, too, is based on a misconception. The foundation of the American position in the world is its economic strength. Unless that is restored which would mean strengthening the dollar and an emphasis on producing a lot more of what we consume, nothing else that is done will make much difference. IMO what is more likely to happen is that in rebuilding our relationship with the EU we’ll be tugging our collective forelock at China as the EU is doing.

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Connect the Dots

At the site of the Council on Foreign Relations they have a nifty infographic illustrating conflicts to watch in 2021. Each country with potential conflicts has a dot. The dots are color-coded based on impact and likelihood. Mouseover the dots for more details about the prospective conflicts.

The squib about the U. S. (Impact: Moderate; Likelihood: High) includes a confrontation between Iran and the U. S., a disruptive cyberattack and U. S. infrastructure, and a mass casualty terrorist attack by a foreign entity. I’d like directly to the infographic if there were a way to do it.

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